North Carolina eyes overhaul of NCInnovation nonprofit
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North Carolina is poised to significantly reform NCInnovation, a nonprofit the state helped form just two years ago, and take back the money it gave the organization to invest in research at the state's universities.
Why it matters: Under a proposal in the state Senate's budget plan, NCInnovation would be required to return the $500 million it got from the state.
- In its brief tenure, NCInnovation had begun investing that $500 million into an endowment and issuing its first round of grants to early-stage research that could create commercial applications.
Driving the news: In exchange for the funding NCInnovation returns to the state, the new budget proposal gives the organization $25 million per year over the next four years to invest in research.
- While the state will maintain some oversight over the organization through NCInnovation's reporting requirements to the state auditor and lawmakers, the legislature will no longer have the power to make appointments to its board.
Between the lines: NCInnovation has been a lightning rod of criticism since its founding, with the state Senate and House at odds over how much money to allocate to the organization.
- Art Pope, a board member appointed by the legislature, has also been a vocal critic of NCInnovation's grant-making process and called for it to be audited.
Zoom in: The proposal would move $400 million of NCInnovation's money to help fund North Carolina Children's Health — a new children's hospital planned in the Triangle.
State of play: NCInnovation appears amenable to the new arrangement, even though it only gives the organization four years of guaranteed funding.
What they're saying: "The Senate's proposal provides NCInnovation with the same annual funding as what the endowment returned over the past year, and it continues that funding through the next two budget cycles," Kelly King, former CEO of the North Carolina bank BB&T (now Truist) and chair of NCInnovation's board, said in a statement.
- King added that he believes the proposal is "entirely consistent with NCInnovation's budget for applied research grants and commercialization support services."
What's next: The Senate's budget proposal still needs to survive negotiations with the House to move forward.